INDIAN FINANCIAL SYSTEM
The economic development of a nation is reflected by the progress of thevarious economic units, broadly classified into corporate sector, governmentand household sector. While performing their activities these units will be placed in a surplus/deficit/balanced budgetary situations.There are areas or people with surplus funds and there are those with adeficit. A financial system or financial sector functions as an intermediaryand facilitates the flow of funds from the areas of surplus to the areas of deficit. A Financial System is a composition of various institutions,markets, regulations and laws, practices, money manager, analysts,transactions and claims and liabilities.
The word "system", in the term "financial system", implies a set of complexand closely connected or interlined institutions, agents, practices, markets,transactions, claims, and liabilities in the economy. The financial system isconcerned about money, credit and finance-the three terms are intimatelyrelated yet are somewhat different from each other. Indian financial systemconsists of financial market, financial instruments and financialintermediation. These are briefly discussed below;